Firstrade Securities Launches Largest Portfolio of Commission-Free ETFs

April 16, 2018 — 12:55 PM EDT

Firstrade Securities, the online brokerage firm, is stepping up the free exchange-traded fund (ETF) game, announcing that it has removed the commissions on more than 700 ETFs. With the announcement, which came last week, Firstrade now offers the most commission-free ETFs of any discount or online brokerage.

"Firstrade's mission since its inception has been to provide its customers with the tools necessary to make it simpler and seamless to execute their investment strategies," said John Liu, Firstrade founder and chief executive officer, in prepared remarks. "We've carefully selected our offerings to best empower investors to design diversified and customized portfolios. It's wealth management at no cost, an investment philosophy we are proud to be pioneering."

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According to the company, of the commission-free ETFs, more than three-quarters have a Morningstar Rating of three, four or five stars. Investors can choose from a wide selection of ETFs across eight asset classes, three exchanges, 82 categories and 40 fund families. The ETFs have to be held for at least 30 days to get the free commission. If it's less than 30 days, the commission is $2.95 per trade. Firstrade noted that the commission-free ETFs include offerings from Vanguard, iShares, SPDR State Street and First Trust, which are all known for offering low-cost ETFs and funds.

The move on the part of Firstrade to expand its free ETF offering comes at a time when interest in ETFs is exploding, as is the number of ETFs investors have to choose from. According to Firstrade, ETFs had assets of more than $4.5 trillion on a global basis at the end of 2017, up from $396.5 billion in 2005. DIY and low-cost investors are drawn to this cheap, passive way of investing, which is why Firstrade, Charles Schwab, TD Ameritrade and E*TRADE have all been increasing their commission-free ETFs.

In February, E*TRADE Financial Corporation (ETFC) announced a big expansion in the number of ETFs that customers can access without commissions, adding 80 from seven providers. It now offers 225 commission-free ETFs, which it said is a 51% increase. Earlier in the same month, TD Ameritrade Holding Corporation (AMTD) announced that it was expanding its own offering of commission-free ETFs by 24, boosting its total number of commission-free ETFs to 320. The Charles Schwab Corporation (SCHW) offers 245 commission-free ETFs.